2017 (12) TMI 534

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....ee paid interest to M/s. Indiabulls Financial Services Ltd., and S.E. Investment Ltd., during F.Y. 2008-2009 without making any TDS as per Section 201(1) read with section 194A of the I.T. Act, 1961. The A.O. also rejected the statement of the assessee that TDS is not made as the amount involved is only surrender of interest to these concerns. Based on the judicial pronouncements in the case of CIT-XVII vs. Dewan Chand 178 Taxman 173 (Del.) (HC) and Hindustan Coca Cola Beverages P. Ltd., vs. CIT 293 ITR 226 (SC), assessee argued that once payee had paid the tax on the amount received by them, then the assessee cannot be treated as assessee-in-default under section 201(1) of the I.T. Act. The assessee on this argument tried to establish that....

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..... His findings in para 5.3 of the order is reproduced as under: "5.3. The reason given by AO and submission of the appellant are considered. The provisions of TDS are made to arrest any leakage of revenue. If the tax is collected by the deductor and deposited in the Government account, the tax comes to revenue of the state. If the deductor does not make the deposit in time, the revenue is lost for the time gap and interest u/s 201(1A) is charged to recover the loss of interest for the period of delay as a compensatory measure. The argument that advance tax has been paid by the deductee does not serve the purpose of TDS provisions and the appellant cannot take a plea not to make TDS which is mandatory. The appellant failed to produce any l....

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....nder : "Section 201 of the Income Tax Act, 1961, provides not only for collection of tax which has not been deducted but for levy and charge of interest also. Sub-section (1A) of the said section provides for liability to pay simple interest at the rate of 12 per cent per annum on the amount of tax from the date on which the tax was deductible till the date the tax was actually paid. The provisions for payment of interest are mandatory and automatic and interest has to be paid from the date on which the tax was deductible till the date on which the tax is actually paid. If the tax has already been paid by the recipient on such income the Income Tax Department may not be justified to recover the said amount of tax, but so far as the liabil....

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.... the Act and the same had not been deposited with the Government. He noticed that two of the employees of the company had been paid commission and perquisites apart from salaries. The assessee did not furnish the quantum of commission and perquisites enjoyed by those employees in the annual return and tax had not been deducted at source as was required under section 192 of the Act on the quantum of commission and perquisites. Accordingly, various amounts were levied as interest under section 201(1A). The Tribunal cancelled the levy. On a references : Held, that the levy of interest was justified." 5.4. The Ld. D.R. submitted that since assessee failed to produce any material before the authorities below as well as before the Tribunal with....